Dechra Pharmaceuticals (DPH) reassures investors that its growth won’t be affected by market volatility following Brexit in a positive trading update, nudging it 2.3% higher to 1,219p.

The veterinary pharmaceuticals company posts revenue growth, including acquisitions, of 21%. Organic revenue growth stands at 11%.

Dechra’s pipeline has expanded as it launches Zycortal in the US, receives approval for several food producing animal products (FAP) as well asdebut poultry vaccine Avishield.

Companion animal products, equine portfolios and FAP are key factors behind revenue growth.

However, the diets division has not recovered to previous sales levels as a result of supply problems.

N+1 Singer says the positive trading update supports the idea that Dechra is a safe haven, highlighting the increasing US exposure and global activities.

Singer analysts also believe that recent weakness in the pound will prompt mid-to-high single digit upgrades, supported by strong underlying trading.

N+1 Singer recommends the stock as ‘buy’ citing further expected growth from newly launched products.

Dechra has acquired Laboratorios Broval for an expanded footprint in Mexico and Latin America and entered the poultry vaccines market by taking over Genera.

The acquisition of Putney in April also offers an advanced pipeline of companion animal products.


Issue Date: 12 Jul 2016